She was accused of telling one resident's family there was no space for them to attend a Christmas dinner, but when they showed up anyway, they found two empty seats beside their family member.

Mrs Gazeley launched an application with the Employment Relations Authority (ERA), arguing that she was unjustifiably suspended and that her dismissal did not stack up.

However, the application was rejected and now the ERA has ordered Mrs Gazeley to pay $30,000 in legal costs and $2294 in other costs.

According to the ERA decision, released today, Oceania incurred $134,000 in legal costs responding to Mrs Gazeley's claims to the ERA and a further $22,000 defending her unsuccessful challenge to the Employment Court.

Mrs Gazeley herself incurred about $67,000 in legal costs.

Oceania twice offered Mrs Gazeley $40,000 to settle her claim which, if accepted, would have saved both parties a great deal of expense.

ERA member Alastair Dumbleton increased the daily cost for the ERA's six meetings from $3500 to $5000 due to the time the inquiry took.

"I consider the case could have been conducted more efficiently on behalf of Mrs Gazeley."

Mrs Gazeley was the senior facility manager at the 62-bed facility which offered rest home and hospital-level care.

Concerns first came to light after a spot audit by the Nelson Marlborough District Health Board last June.

The DHB was so concerned by what they saw, they appointed a temporary manager and Mrs Gazeley was suspended.

Oceania "inquired extensively" into the DHB's concerns, which led to Mrs Gazeley's sacking.

According to the ERA's finding on the case, released in December last year, Mrs Gazeley called out on four or five occasions that jellimeat was for dinner.

There was also evidence she threatened to tie up one frail resident who wanted to get out of her chair.

"It was reasonable in my view ... to consider those matters in conjunction with the most serious failure with regard to clinical oversight," Mr Dumbleton said.

"The authority finds that Mrs Gazeley does not have a personal grievance in relation to either action."

Mrs Gazeley had wanted "special damages" of $19,204, but Mr Dumbleton said there was "no basis for such a claim".